However, the etymology needs to be taken with heaps of skepticism. The phonetic reconstruction leads to a root that could mean "bend" (see Pokorny IEW). That's it. It doesn't say that "camp" derived directly from this meaning, and, in case of root homophony, it might not even be indirectly related, except perhaps through convergent processes.
I've heard that partial answers are encouraged (on Latin.SE, so why don't I answer there, where this same Q had been asked before?)
Compare by the way *kwel- "turn" (cf. wheel) which gives at least one reflex that means ca. "village" in Greek, so there's precedent, if you note that the circular layout is one of the most frequent for the arrangement of houses; or that a village will often be surrounded by fields, as @yellow-sky tried to imply in a comment.
Then cp. *tk'ey- (*tek'-) > *k'ey- (cf. civis); Also cp. hoop, Ger. Hof "yard, court, mannor". Compare further comb (<\ghombh- "tooth", think fence, cp. town ~ Ger. Zaun "fence"; further cp. *ghmo- "earth", whence also human; further homo "same" < *sem- "together, one" vs. *k'om-, co- "with", perhaps from *k'e- "here"; note how confusing centum satem must have been on fiekd trips), maybe there's a fleeting relation to be made.